Department for Work and Pensions


Tools menu

Youth Contract

Updated 24 September 2013

Wage incentives

Employers who take on young people may be eligible for wage incentives of up to £2,275 each.

Wage incentives are available for employers who recruit an 18 -24 year old who has been receiving benefits for at least six months through Jobcentre Plus.

Wage incentives are also available through Work Programme and Work Choice providers.

How does the wage incentive scheme work?

The wage incentive is available if you employ someone for 16 hours or more each week in a job lasting more than 26 weeks. There are two rates:

This will be paid 26 weeks after the employee starts work. Small businesses with fewer than 50 employees can claim a part payment eight weeks after the employee starts work.

Who can claim a wage incentive?

Wage incentives are primarily available to private, voluntary and community sectors and social enterprise employers. Central government departments, their executive agencies and Non-Departmental Public Bodies (NDPBs) will be excluded from claiming them, however the wider public sector such as NHS trusts, will not.

I’m interested in employing a young person using the wage incentive, what do I do next?

Contact Jobcentre Plus or one of your local Work Programme providers, they will give you further information, advice on the eligibility conditions and support to identify the right person.

Employing a young person using a wage incentive through the Work Programme

Employing a young person using a wage incentive through Jobcentre Plus

How can I claim the wage incentive?

When the young person starts with you, the Work Programme provider or Jobcentre Plus, will issue a wage incentive claim form and give you more details on how and when to make the claim. You will claim the payment from Jobcentre Plus who will validate the claim and make the payment directly into the employer’s bank account.

Our guide explains how employers can make a claim for a wage incentive, once they have been issued with a claim form.

Real life stories

How wage incentives are helping young people into work.

Frequently asked questions on the wage incentive scheme

Factsheets for employers

Terms and conditions